Correlation Between Travelers Companies and PRAXAIR
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By analyzing existing cross correlation between The Travelers Companies and PRAXAIR INC 355, you can compare the effects of market volatilities on Travelers Companies and PRAXAIR and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Travelers Companies with a short position of PRAXAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and PRAXAIR.
Diversification Opportunities for Travelers Companies and PRAXAIR
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Travelers and PRAXAIR is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and PRAXAIR INC 355 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PRAXAIR INC 355 and Travelers Companies is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on The Travelers Companies are associated (or correlated) with PRAXAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PRAXAIR INC 355 has no effect on the direction of Travelers Companies i.e., Travelers Companies and PRAXAIR go up and down completely randomly.
Pair Corralation between Travelers Companies and PRAXAIR
Considering the 90-day investment horizon The Travelers Companies is expected to generate 1.06 times more return on investment than PRAXAIR. However, Travelers Companies is 1.06 times more volatile than PRAXAIR INC 355. It trades about 0.13 of its potential returns per unit of risk. PRAXAIR INC 355 is currently generating about 0.06 per unit of risk. If you would invest 15,912 in The Travelers Companies on September 4, 2024 and sell it today you would earn a total of 10,439 from holding The Travelers Companies or generate 65.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 40.69% |
| Values | Daily Returns |
The Travelers Companies vs. PRAXAIR INC 355
Performance |
| Timeline |
| The Travelers Companies |
| PRAXAIR INC 355 |
Travelers Companies and PRAXAIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and PRAXAIR
The main advantage of trading using opposite Travelers Companies and PRAXAIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, PRAXAIR can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in PRAXAIR will offset losses from the drop in PRAXAIR's long position.| Travelers Companies vs. Progressive Corp | Travelers Companies vs. Cincinnati Financial | Travelers Companies vs. W R Berkley | Travelers Companies vs. The Allstate |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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